India: Tax Authorities

The Madras High Court held that ADD under Notification No. 42/2017 is leviable only on Castings for wind-operated electricity generators and cannot be extended to the entire gearbox merely because castings form part of such equipment.

The Hon’ble Punjab and Haryana High Court (HC) in Jyoti Sareen vs. UOI & Others (CWP No. 15791-2024 (O&M)) (Order) held the retrospective amendments carried out vide the Finance Act, 2026, with respect to the powers of the Jurisdictional Assessing Officer (JAO) to issue a reopening notice under section 148 (Reopening Notice) of the Income-tax Act, 1961 (IT Act), as unconstitutional, being violative of the ‘doctrine of separation of powers’ and thus violative of Article 14 of the Constitution of India.

A person living outside India gifts shares of a US company to a family member or associate resident in India. No price is paid, no money leaves India, and there may be no commercial deal between them. It looks like a simple private transfer.

Hon’ble Mumbai Tribunal holds that where the sale consideration for unquoted shares exceeds the Rule 11UA FMV, the AO cannot substitute the actual consideration with a higher value derived from asubsequent independent strategic transaction.

In Aerocom Cushions Private Limited v. Assistant Commissioner (Anti-Evasion), CGST & CX, Nagpur-1, the Nagpur Bench of the Bombay High Court quashed a Show Cause Notice demanding Goods and Services Tax (“GST”) on the assignment of leasehold rights in an industrial plot allotted by the Maharashtra Industrial Development Corporation (“MIDC”). The Court held that such an assignment constitutes a transfer of benefits arising out of immovable property and does not amount to a “supply of service” under the Central Goods and Services Tax Act, 2017 (“CGST Act”).

Alternative investment funds (“AIFs”) are privately pooled investment vehicles which raise funds and invest in accordance with a defined investment policy for the benefit of the investors. AIFs established and operating within India (except in the Gujarat International Finance Tec-City (“GIFT City”)) are regulated by the Securities and Exchange Board of India (“SEBI”) under the SEBI (Alternative Investment Funds) Regulations, 2012, as amended (“AIF Regulations”), which allow AIFs to be structured as a trust, a limited liability partnership (“LLP”), a company, or a body corporate.

Business trusts — Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) — and their unit holders are taxed under a pass-through framework built around Section 223 of the Income-tax Act, 2025 (corresponding to Section 115UA of the erstwhile 1961 Act), read with Schedule V (Table Serial Nos. 3, 4 and 5) of the ITA 2025, which mirror clauses (23FC), (23FCA) and (23FD) of Section 10 of the ITA 1961.

In a significant move to deepen foreign participation in India’s sovereign debt market, the Government of India promulgated the Income-tax (Amendment) Ordinance, 2026 on 5 June 20261, introducing a comprehensive tax exemption for eligible foreign investors investing in Government securities. Effective retrospectively from 1 April 2026, the Ordinance exempts specified income arising from Government securities from withholding tax and long-term capital gains tax, thereby addressing one of the principal tax-related barriers to foreign investment in Indian debt markets.

The Supreme Court has clarified the service tax treatment of marketing and promotion expenditure incurred by a broadcaster on commercially exploiting acquired music and song video rights. The Court upheld the CESTAT’s view that such expenditure does not represent consideration for any taxable service to the film producers, since the broadcaster promoted the rights for its own benefit as assignee and therefore no taxable service relationship existed.